Altruism and egoism of the social planner in a dynamic context

Introduction The models of endogenous growth theory investigate different determinants of ongoing growth. Externalities in the accumulation of the private inputs, but also productive public inputs are analysed. Because of market failure the decentrally obtained results are not efficient, and a social planner may cause welfare gains through intervention. This planner usually is equipped with perfect information and internalises the external effects arising from the accumulation of private capital (Romer 1986), technological knowledge (Grossman and Helpman 1991), (Aghion and Howitt 1992), human capital (Lucas 1988) or from the financing of a productive governmental input (see e.g. Barro 1990; Barro, Sala-i-Martin 1992, 1995; Turnovsky 2000).